Hello DAK, <<Any opinion on the debate about the costs involved in building Ivanhoe's mine in Mongolia???>>
I am reminded of the complete and absolute disaster called AnTaiBao Coal Mine that Occidental Petroleum/Island Creek tried to do in the middle of Chinese nowheresville in the mid-80s, complete with top national leader support and local officialdom obstruction. All money invested was lost, leaving some huge trucks, an enormous pit, and a railhead as reminders.
I do not own Ivanhoe shares, and while I am not familiar with the supposed valuations or imagined riches, I am suspicious of its ability to make money by first digging out the gold and then, eventually, remitting income to bank account, after incurring costs as listed below:
(a) normal and anticipated costs per nature of business (capital investment could be higher or lower, depending on approach and state of existing infrastructure)
(b) cost of mistakes in execution of operations
(c) cost of bribes for logistic support and transport
(d) cost of fraud by sub-contractors
(e) cost of eventual labour problems once actual gold is dug up
(f) cost of ownership and partnership disputes
(g) cost of trying to fix matters
Chugs, Jay
I know the reviewer of the book, Pat Powers, who still lives in Beijing
216.239.53.104
<<Wen and the Art of Doing Business in China
by Daniel R. Joseph. Pittsburgh, PA: Cultural Dragon Publishing, 2001. 240 pp. $20.00 hardcover; $16.00 softcover.
Reading the back cover of Wen and the Art of Doing Business in China, I was fascinated to learn that Dan Joseph had run a company in Datong, Shanxi, "where no business had ever been built before." Unless, of course, you count my former employer, the $750 million Antaibao Coal Mine, which was developed in the late 1980s by Occidental Petroleum/Island Creek, or the various mining equipment suppliers that have been providing services in the Datong area for two decades.
So with the author firmly ensconced in the penalty box, it was with some trepidation that I started to read. Essentially an autobiographical tale of the author's trials running a joint venture manufacturing operation, Joseph's book walks the reader through his experiences from the start-up phase to his resignation and the company's ultimate failure.
Although the author warns the reader up front that Wen is both a general and a business work explaining "the relationships between culture and business, and culture and economic and political development," it would have been better as a pure business book. For example, in a section of the book where the author gives his personal vision of China's future, he weakens his more compelling theme about cultural differences between US and PRC management styles and commercial expectations.
Despite its flaws, Wen actually contains a lot of practical anecdotes and advice about the difficulties individuals and smaller companies face on the ground in China. As one of the better cautionary tales out there, Wen should be mandatory reading for those who are being sent to work in China--especially for those sent outside of the major cities--and for the managers dispatching them there.
--Patrick J. Powers
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